After reporting a notable increase by U.S. leading economic indicators in the month of July, the Conference Board released a report on Thursday showing an unexpected decrease by its leading indicators index in the month of August.
The Conference Board said its leading economic index edged down by 0.1 percent in August following a revised 0.5 percent increase in July. The drop surprised economists, who had expected the index to come in flat compared to the 0.4 percent increase originally reported for the previous month.
The modest decrease by the index came as negative contributions from new orders in manufacturing, consumer expectations for business conditions, average weekly manufacturing hours and initial jobless claims offset positive contributions from the financial components.
Ataman Ozyildirim, an economist at the Conference Board, said, "The U.S. LEI has declined in three of the last six months."
"While its six-month growth rate has slowed substantially, it still remains in growth territory due to positive contributions from the financial components including stock prices, yield spread and the Leading Credit Index," he added.
The report also showed that the coincident economic index inched up by 0.1 percent in August following a 0.3 percent increase in July.
The modest increase by the coincident index reflected positive contributions from manufacturing and trade sales, personal income less transfer payments and employees on non-farm payrolls. A negative contribution from industrial production helped to limit the upside for the index.
Additionally, the Conference Board said the lagging economic index rose by 0.2 percent in August after climbing by 0.3 percent in the previous month.
Positive contributions by the change in consumer prices for services, commercial and industrial loans outstanding and the ratio of manufacturing and trade inventories to sales contributed to the increase by the lagging index.
Ken Goldstein, economist at The Conference Board, said, "The economy continues to be buffeted by strong headwinds domestically and internationally."
"As a result, the pace of growth is unlikely to change much in the coming months," he added. "Weak domestic demand continues to be a major drag on the economy."
by RTT Staff Writer
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